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Money and the U.S. Capitol

Regulation and Compliance > Legislation

Billionaire Minimum Income Tax Act Introduced by House Democrats

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What You Need to Know

  • The bill would enact Biden’s proposal to require households worth over $100 million to pay at least a 20% tax rate on their full income, including unrealized gains.

Top House Democrats have introduced the Billionaire Minimum Income Tax Act, which would enact President Joe Biden’s proposal to require households worth over $100 million to pay at least a 20% tax rate on their full income, including unrealized gains.

The bill has 32 co-sponsors and was introduced by Reps. Steve Cohen, D-Tenn., and Don Beyer, D-Va., chairman of the Joint Economic Committee in late July. The lawmakers said they introduced the bill “after extensive consultation with the White House and Treasury Department officials.”

House Democrats may try to insert this bill into the Inflation Reduction Act, which passed the Senate and is to be voted on by the House Friday.

A section-by-section review of the bill states: “The minimum tax imposed cannot be greater than 40% of the amount by which the taxpayer’s net worth exceeds $100 million (or half in the case of a separate return), such that the 20% rate fully kicks in for taxpayers with a net worth over $200 million.” For example, the minimum tax on a joint-filing taxpayer with net worth of $200 million would be capped at $40 million.

“The ultrawealthy pay very low tax rates because their affluence derives primarily from the soaring value of their assets and our current tax code lets billionaires avoid taxes on gains unless and until they sell their assets,” Cohen said. “So while working families pay taxes on each and every paycheck or pension payment, the ultrawealthy can make hundreds of millions of tax-free dollars a year.”

According to Cohen, the bill “will close loopholes in our tax code and ensure billionaires pay a fairer share. It’s time to make the tax system fair.”

The Billionaires Minimum Income Tax Act “is a simple policy to prevent billionaires from paying a lower tax rate than working families,” Beyer added. “Our bill would impose a minimum tax rate on the wealthiest few with measures to prevent tax avoidance, requiring the super-rich to pay their fair share, reduce inequality, and fund services the American people depend on.”

Rep. Dwight Evans, D-Pa., said in the statement that “as a member of the tax-writing House Ways and Means Committee, I’m proud to co-sponsor President Biden’s Billionaire Minimum Income Tax.”

The estimated $360 billion in revenue over 10 years derived from the bill “could be used for priorities like lowering health care and child care costs for families, fighting climate change, restoring the Child Tax Credit expansion, and fighting gun violence,” Evans explained.


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